COUNCIL tax payers in the Forest could be landed with a huge bill from the district council next April – and an even bigger one the following year.

Members of the newly elected executive committee meet for the first time this week and will walk into a nightmare financial black hole.

They face the prospect of asking council tax payers to cough up extra money to cover a projected deficit of £809,610 forecast for 2004/5.

Of that sum £300,000 is the bill the council faces for new recycling initiatives initially funded by central government but now on the shoulders of local taxpayers.

The following financial year has revealed an even bigger shortfall as the deficit for 2005/6 is estimated at £1,223,930. That figure includes the £300,000 recycling bill and a further £200,000 to cover pension contributions - due in the main to the poor performance of stocks and shares.

The details are contained in a four page Revenue Budget Strategy document prepared by David Matthams, the council's director of resources.

The figures are all based on the council providing and maintaining services at their current levels and assume the grant allocation from central government – the Formula Grant Allocation – increases in line with previous years.

Members will be told that for each £100,000 of deficit it will require an increase in council tax of approximately £3.50 (or 2.5 per cent) per household – this translates to rises of around 17 per cent across the board for 2004/5 and even higher for the following year.

Already there are concerns the county council and police budgets will again be above the rate of inflation.

The new leader of the council, Coun Bill Hobman, who is also chairman of the executive committee, has questioned aspects of expenditure and said he would comment on the situation after the meeting.

"I was aware the figures would be high and that is why I wanted a precept a little higher than the 4.5 per cent we agreed for this year to cushion the increase," he said.

Coun Stephen McMillan, chairman of the council's economy overview and scrutiny committee, said the council was now facing a huge financial problem.

"We are faced with a huge financial problem that is the result of the previous Labour controlled council making decisions with long term costs greater than income, despite increasing council tax ahead of inflation on a regular basis.

"Ahead of the elections this year the council tax rise was cynically kept low to hide this problem. Members have a very serious job to do now by carrying out a root and branch review of the council's budget to ensure the council focuses on the priorities for this district," he said.

"I would find in inconceivable that any elected member would serious expect to cover deficits of this size by inflicting bigger council tax increases next year than we have had this year.

"I hope all members look seriously at the full, four year, financial implication of any decisions they are making from this point forward. We have to ask 'Do we have to do it? What does it cost? Can the taxpayer afford it?' for every single decision members are involved in making."